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4.12 Analysis of Financial Statements—CBSE XII
Notes to Accounts
Particulars 31st March, 31st March,
2024 (`) 2023 (`)
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit & Loss 70,000 50,000
2. Short-term Borrowings
Current Maturities of Long-term Debts (12% Debentures) ... 20,000
3. Trade Payables
Creditors 60,000 40,000
Bills Payable 1,00,000 20,000
1,60,000 60,000

Solution: P.S. Ltd.
CASH FLOW STATEMENT for the year ended 31st March, 2024
Particulars `
I. Cash Flow from Operating Activities
Closing Balance of Surplus, i.e., Balance in Statement of Profit & Loss 70,000
Less: Opening Balance of Surplus, i.e., Balance in Statement of Profit & Loss 50,000
Net Profit before Tax and Extraordinary Items 20,000
Add: Non-cash Expenses: Patents Amortised 8,000
Non-operating Expense: Interest on 12% Debentures* 12,000 20,000
Operating Profit before Working Capital Changes 40,000
Add: Increase in Current Liabilities:
Creditors 20,000
Bills Payable 80,000 1,00,000
1,40,000
Less: Increase in Current Assets and Decrease in Current Liabilities:
Outstanding Expenses 5,000
Trade Receivables 20,000
Inventories 20,000 45,000
Cash Flow from Operating Activities 95,000
II. Cash Flow from Investing Activities
Purchase of Land and Building (80,000)
Loans and Advances (30,000)
Cash Used in Investing Activities (1,10,000)
III. Cash Flow from Financing Activities
Proceeds from Issue of Equity Shares 50,000
Repayment of Long-term Borrowings (20,000)
Interest on 12% Debentures (12,000)
Cash Flow from Financing Activities 18,000
IV. Net Increase in Cash and Cash Equivalents (I + II + III) 3,000
V. Cash and Cash Equivalents in the beginning of the Year (` 3,000 + ` 12,000) 15,000
VI. Cash and Cash Equivalents at the end of the Year (IV + V) (` 5,000 + ` 13,000) 18,000

*Debentures’ interest @ 12% on ` 1,00,000.